-
Payment companies expect higher subsidies for UPI transactions in the upcoming budget.
-
The government currently provides subsidies to keep UPI transactions free for users, but payment firms say the current allocation is inadequate.
-
Industry players are also debating whether to charge a minimal fee (MDR) on UPI transactions to open up monetization opportunities.
Payment companies are hoping for higher subsidies for UPI transactions in the upcoming budget. The government currently provides subsidies to keep UPI transactions free for users, but payment firms say the current allocation of Rs 3,500 crore is inadequate. With UPI transactions growing rapidly, reaching 14 billion transactions worth Rs 20.45 lakh crore in May, payment companies are seeking enhanced reimbursement to continue facilitating free transactions.
Industry players are also debating whether to charge a minimal fee (MDR) on UPI transactions to open up monetization opportunities. However, the government has clarified that there are no plans to levy charges on UPI services. The Payments Infrastructure Development Fund (PIDF) provides subsidies for promoting RuPay and UPI transactions, but payment companies say the current allocation needs to be increased to support the growth of digital payments.
The debate around MDR on UPI transactions has been ongoing, with some industry players pitching for a minimal fee to be charged in phases. However, the government’s stance on keeping UPI transactions free for users has been clear. As digital payments continue to grow, payment companies are seeking support to continue facilitating free transactions and investing in robust payment infrastructure and security standards.
